In re Lazzara

287 B.R. 714

In re Michael LAZZARA, Debtor Benjamin Cutler, by his agent Sheilah Cutler, Plaintiff, v. Michael Lazzara, Defendant.

Bankruptcy No. 99 B 02000.

Adversary No. 99 A 00582.

United States Bankruptcy Court, N.D. Illinois, Eastern Division.

April 18, 2002.

COPYRIGHT MATERIAL OMITTED

Paul J. Skryd, North Riverside, IL, for debtor.

Jay A. Steinberg, Foley & Lardner, Chicago, IL, for trustee.

Memorandum Opinion and Order

ROBERT E. GINSBERG, Bankruptcy Judge.

This matter is before the Court on the First Amended Petition [sic] for Nondischargeability of Plaintiff Benjamin Cutler ("Benjamin"). A trial was held on May 11 and 22, 2000. For the reasons stated in this opinion, this Court finds that the debts owed to Benjamin by Defendant Michael Lazzara (the "Debtor") are dischargeable.

Jurisdiction

The Court has jurisdiction over this matter under 28 U.S.C. § 1334(b) and Internal Operating Procedure 15(a) of the United States District Court for the Northern District of Illinois. This matter is a core proceeding under 28 U.S.C. § 157(b)(2)(I) as a proceeding arising under § 523(a)(6) of the Bankruptcy Code, 11 U.S.C. § 523(a)(6).

Facts

Benjamin owns real property located at 3130 S. Laramie Avenue, Cicero, Illinois. The building on the property contains a tavern, and two apartments at the rear of the tavern. Both Benjamin and his daughter, Sheilah Cutler, alternatively "Sheilah" and "Benjamin," or collectively "the Cutlers," are active in the operation of the tavern and in the management of the apartment building. May 11, 2000 Transcript of Proceedings before the Honorable Robert E. Ginsberg ("Tr. I") at 16-17.

The Debtor moved into one of the apartments in late 1995 or early 1996. Tr. I at 5, 18, 35. There was no written lease with respect to the apartment that the Debtor occupied. According to the Cutlers, Benjamin charged the Debtor rent of $550.00 per month. Tr. I at 5, 17.

Initially, the Debtor and his son were the only occupants of the apartment rented by the Debtor. Sometime later, Veronica Robles ("Robles"), the Debtor's fiancee, moved into the apartment along with her two daughters. The Debtor was the father of one of the children, and the other child was Robles' daughter from another relationship. Two dogs, one a Chihuahua, and the other a Golden Retriever, also lived in the apartment with the Debtor.

The Debtor moved out of the apartment in June 1998, after the Circuit Court of Cook County, Illinois (the "State Court") entered an order of eviction in a forcible detainer action Sheilah had filed several months earlier. Tr. I at 7, 38, 48, 78. At the time of the eviction, the Debtor was living in the apartment with Robles, his and Robles' daughters, and the Golden Retriever. Tr. I at 18, 37-38. In addition to entering the order of eviction, the State Court entered a judgment in the amount of $3,885.00 for unpaid rent against the Debtor. Answer to First Amended Petition for Nondischargeability ("Ans."), ¶ 9.¹

Benjamin testified at trial that after the Debtor vacated the premises, he entered the apartment and found it "absolutely in shambles." Tr. I at 10. According to Benjamin, the rugs were ripped and reeked of urine and feces from the dogs. Tr. I at 12. The door was "like punched in," Tr. I at 10, and there were crayon marks on the wall. When the rug was removed, tiles came off the bedroom floor. Tr. I at 10. The flooring had to be replaced because it was wet and warped. Tr. I at 12. Benjamin testified that he paid over $5,000 for repairs to the apartment. Tr. at 11.

Acting on Benjamin's behalf, Sheilah brought an action in the State Court for property damage to the apartment. Tr. I at 11. Ultimately, a judgment was entered in favor of Benjamin and against the Debtor in the amount of $4,982.74 property damage. Ans., ¶ 9. At the trial in this case, Sheilah testified that the second State Court judgment was entered by default. Tr. I at 30. While the Debtor testified that he had appeared in the second State Court proceeding, his testimony was unclear whether he confused that proceeding with the earlier forcible detainer action. Tr. I at 43-47. Robles stated that she had testified in the State Court "same like I am now." Tr. I at 78.

In this adversary proceeding, Benjamin seeks a determination that the judgments he holds against the Debtor for unpaid rent and property damage are nondischargeable under 11 U.S.C. § 523(a)(6), as debts "for willful and malicious injury by the debtor to another entity or to the property of another entity." As a basis for relief, Benjamin contends that the Debtor stopped paying rent after Benjamin reminded him that under the terms of the parties' oral lease, only the Debtor and his son could live in the apartment. Tr. I at 5, 24. Pets were not allowed per se. Tr. I at 7. It is Benjamin's view that after the Cutlers obtained an order of eviction against the Debtor from the State Court, the Debtor retaliated by willfully and maliciously damaging the apartment. Plaintiff's Memorandum in Support of a Finding of Nondischargeability at 5.

The Debtor denies that the parties had an oral agreement on the terms that Benjamin alleges. Tr. I at 36. At trial, the Debtor testified that Benjamin said nothing about pets and additional tenants. According to the Debtor, Robles moved into the apartment only a few months after he did. The Debtor maintains that Benjamin knew that Robles was living there, but did not object. Tr. I at 36, 51-53. The Debtor acknowledged that he had refused to pay rent for the last five to six months that he lived in the apartment. He justified his failure to make rent payments on grounds that Benjamin failed to make necessary repairs. Tr. I at 39, 51.

According to the Debtor, the apartment was "a wreck" when he moved into it. Tr. I at 39. Problems requiring attention included the blood stains from the spoiled meat in the refrigerator and on the kitchen floor; the filthy carpeting; and a hole in the living room picture window. In addition, electrical fixtures lacked covers, there was a hole in a bedroom door, and termite damage to window frames was at such a level as to cause glass to fall out. Tr. I at 48-49. On the plus side, the Debtor testified that he cleaned the apartment so that the premises were at least minimally habitable. Tr. I at 43, 49-50.

The Debtor acknowledged that some repairs were made. For example, the Cutlers caused the rotting kitchen floor to be replaced. The Debtor nevertheless testified that the repair was incomplete, since he could see light through a gap between the baseboard and the floor when anyone turned on the lights in the basement below his apartment. Tr. I at 50. The Debtor denied that he intentionally damaged any part of the apartment, but he did admit that his youngest daughter may well have written on the walls with crayons. Tr. I at 49-50. The Debtor stated that he did not believe that he told the Cutlers about the termite damage he found in the building. Tr. at 49.

When asked about the condition of the premises at the time he left the apartment, the Debtor testified that the premises were clean, and that there was "nothing wrong," except for the hole in the window that had been there from the outset, and the "nasty carpet" in one or more rooms. Tr. I at 42-43.

At trial, each of the parties presented two additional witnesses in support of each party's conflicting version of the facts surrounding this dispute. Benjamin called Sheilah Cutler and John Edward Pierce as witnesses. Robles and Daniel Carabine testified on the Debtor's behalf.

Sheilah testified that when the Debtor moved into the apartment, there were some items in need of repair. A new carpet had recently been installed, but replacement of the kitchen floor, subfloor and joists was not completed until approximately a month or two later. Additionally, all the rooms were painted shortly after the Debtor moved into the apartment. According to Sheilah, after the initial repairs, everything was intact, and nothing was damaged. Tr. I at 17, 21-22, 31-33.

Sheilah further testified that the Debtor moved out of the apartment in June or July 1998. Tr. I at 18, 25. After the Debtor moved out, Sheilah entered the apartment and found a great deal of damage. There were holes in one or more doors, the front door was broken, some doorknobs had been removed, the toilet was stopped up, there were crayon marks and large pictures drawn on the walls, and the carpet was shredded. Sheila testified that there was feces on the rug, and that when she pulled the rug up, tiles stuck to the rug. Urine was visible in the spaces between the tiles underneath the rug. Tr. I at 26, 31.

Sheilah said the Debtor gave her several reasons why he stopped paying rent. First, the Debtor told the Cutlers that he would not pay rent because "we were throwing him out anyway," and second because he had complaints about "some damages." Tr. I at 20. Later in her testimony, Sheilah stated that the Cutlers told the Debtor and Robles to leave the apartment as soon as they found out that Robles was living there with the Debtor. Tr. I at 33.

Sheilah was asked about the results of a inspection completed by the Village after the Debtor left the apartment. Sheilah testified that the Village inspectors found the premises filthy and directed her to have it cleaned and painted. Tr. I at 27. Sheilah initially denied that there was some termite damage, but then acknowledged that some "minor" damage was found. Tr. I at 27-29.

John Edward Pierce ("Pierce"), a general contractor, essentially corroborated Benjamin's and Sheilah's testimony. Pierce testified that in the winter of 1996-1997, he made extensive repairs to the apartment occupied by the Debtor. At that time, the major concern was the repair of the floor between the bathroom and kitchen of the apartment. Plumbing and electrical work was done, floors in the bathroom and kitchen were replaced, and the entire apartment was painted. May 22, 2000...